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Writer's pictureThe Trade Academy Team

Monday Morning Coffee - Markets Update - 28 October 2024 - Market Impact: Oil Prices Drop Amid Mideast Relief and Yen Weakens with LDP Japanese Government's Loss of Majority


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Markets Update: The LDP no longer holds the majority in Japan, causing the yen to reach 153 against the dollar. Oil prices drop by 4% following a limited strike by Israel. Keep an eye out for earnings reports from AMZN, APPL, GOOG, META, MSFT, and focus on US job data.

 

Global Markets Roundup: 28 October 2024


FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | GOLD | CL1! | ZC1! | ZS1! HG1!


On Monday, the yen reached a three-month low due to Japan's ruling party losing its parliamentary majority, while oil prices dropped following Israel's strike on Iran, which did not target oil or nuclear facilities. Initially declining, Japan's Nikkei (NI225) index later rose by 1.9%, while the yen (USDJPY) weakened by up to 0.9% to 153.88 against the dollar after the ruling Liberal Democratic Party (LDP) achieved its weakest election outcome since 2009. Brent crude futures (BRN1!) plummeted by 5%, reaching $71.99 per barrel as Israel's response to an Iranian missile attack focused on non-energy-related sites near Tehran. The LDP and its coalition partner Komeito secured 215 lower-house seats in Japan's weekend election, falling short of the 233 seats required for a majority. This outcome led investors to anticipate a more dovish economic policy direction from the emerging government, putting pressure on the yen.


U.S. stock futures, ES1!, rose by 0.4% ahead of an eventful week filled with earnings reports and data releases. In early European trading, the pan-European Euro Stoxx 50 futures (FESX1!) increased by 0.26%, and German DAX futures (DAX1!) showed a 0.21% uptick. Five of the major seven companies are set to announce their earnings: Alphabet (GOOG), Microsoft (MSFT), Meta (META), Apple (AAPL), and Amazon (AMZN). Investors are closely watching the U.S. jobs report on Nov. 1 to assess the impact of a potentially stronger economy on interest rate cuts, while inflation data from Europe and Australia is also anticipated.


In currencies, on Monday, the U.S. dollar DXY is on track for its most significant monthly gain in 2-1/2 years, driven by the robust U.S. economy and the potential of a Donald Trump presidency. Meanwhile, the overall currency markets are steady. Recent signals indicate that the markets are expecting Trump to secure a second term, even though a Reuters/Ipsos poll suggests that Vice President Kamala Harris is slightly leading Trump in national polls. In October, the benchmark 10-year Treasury yields (US10Y) have increased by 43 basis points, in contrast to 16 bps for 10-year bunds (DE10YT=RR) and 23 bps for gilts (GB10YT=RR). There is a 95% likelihood of a 25 basis point reduction in the Federal Reserve rate at the upcoming November meeting, a decrease from the 50% probability of a larger half-point cut a month ago. The Japanese yen USDJPY, dropped by as much as 0.9% to 153.88 against the dollar after the ruling Liberal Democratic Party (LDP) experienced its poorest election outcome since 2009 in Japan over the weekend. EURUSD | USDJPY | GBPUSD | AUDUSD | NZDUSD


In commodities, Gold reached its highest point last week, staying close to that level at $2,736 per ounce. Brent and U.S. West Texas Intermediate crude futures dropped to their lowest points since October 1 at the beginning of trading. Brent BRN1! was priced at $72.59 per barrel, a decrease of $3.46, or 4.6%, and WTI CL1! fell by $3.37, or 4.7%, to $68.41 per barrel. The leading soybean contract on the Chicago Board of Trade (CBOT) represented by ZS1! experienced a decrease of 0.7%, settling at $9.90-3/4 per bushel, while corn, indicated by ZC1!, saw a slight decline of 0.4% to $4.13-1/2 per bushel. Wheat, identified by ZW1!, also fell by 0.8% to $5.64-1/4 per bushel, reaching its lowest point since September 9 during the earlier session. GOLD | CL1! | ZC1! | ZS1! HG1!


Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.



 

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team

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